Two chemicals producers merge and deliver their savings eight months early

The challenge

The two companies made complementary specialty chemicals for coatings and construction, with combined revenue of about €2.3 billion and 7,800 employees across fourteen plants. Both had been founded by families and still carried their founders’ habits: one centralized and engineering-led, the other decentralized and commercial.

The merger was announced with €75 million of annual cost savings, to be delivered within three years. Investors were skeptical. Both companies had completed smaller acquisitions that had underdelivered, and key customers had signaled that they would test the new company’s prices and service at the first opportunity.

Our approach

We were appointed four months before closing, which gave time to do the work that most integrations leave too late. Savings estimates were rebuilt from the bottom up, plant by plant and category by category, and each was assigned to the executive who would own it after closing.

The integration followed a few firm principles:

• The top three layers of leadership, about 140 roles, were selected and announced before day one, using the same structured assessment for candidates from both companies
• Customer-facing teams were left untouched for the first six months, with a named executive sponsor for each of the fifty largest accounts
• Procurement savings came first, since they carried the least risk to the business, followed by back-office consolidation and then the plant network
• A joint integration office met weekly, tracking savings against the budget rather than a separate program tracker

Works council consultations in both countries were planned into the timetable from the start. We met employee representatives early and shared the rationale for each change before it was announced.

The impact

The combined company reached €86 million in annual run-rate savings, 115 percent of the announced target, twenty-eight months after closing, eight months ahead of plan. Procurement contributed almost half, through consolidated purchasing of raw materials and logistics. Two smaller plants were merged into larger sites with no loss of capacity.

Ninety-four percent of the people in roles identified as critical were still with the company a year after closing. Revenue from the fifty largest customers grew by 3 percent over the same period, and none moved a major contract to a competitor.